Canada's Saputo To Buy Dairy Crest For About £975M
Canada's Saputo Inc said on Friday it would buy Britain's largest dairy food company Dairy Crest Group Plc for about £975 million ($1.27 billion), giving it access to the UK market.
Saputo, one of Canada's largest dairy companies, will expand its cheese and spreads brands, adding Dairy Crest's Cathedral City and Davidstow cheeses, and Country Life butter.
Saputo has a track record of growing through acquisitions. It bought Australia's Murray Goulburn Co-operative for $490 million in 2017, becoming Australia’s top milk producer and expanding into China.
Dairy Crest had shifted its strategy to focus more on its profitable cheese business and spreads after selling some dairy operations as it battled low milk prices in the UK.
Shares of Dairy Crest are expected to open up about 10%, according to a premarket indicator.
The deal price of 620 pence in cash for each Dairy Crest share by Saputo's unit Saputo Dairy UK represents a premium of about 11.7 percent to the London-listed company's close of 555 pence on Thursday.
Dairy Crest plans to recommend that shareholders vote in favour of the deal, considering the terms "fair and reasonable".
Lazard acted as sole financial adviser to Saputo, while Greenhill worked with Dairy Crest.